Business Week Report on 12% Increase in US Poverty
AUG. 30 4:11 P.M. ET Even with a robust economy that was adding jobs last year, the number of Americans who fell into poverty rose to 37 million — up 1.1 million from 2003 — according to Census Bureau figures released Tuesday. It marks the fourth straight increase in the government’s annual poverty measure.Poverty rate rises to 12.7 percent
The Census Bureau also said household income remained flat, and that the number of people without health insurance edged up by about 800,000 to 45.8 million people.
“I was surprised,” said Sheldon Danziger, co-director of the National Poverty Center at the University of Michigan. “I thought things would have turned around by now.”
While disappointed, the Bush administration — which has not seen a decline in poverty numbers since the president took office — said it was not surprised by the new statistics.
Commerce Department spokeswoman E.R. Anderson said they mirror a trend in the ’80s and ’90s in which unemployment peaks were followed by peaks in poverty and then by a decline in the poverty numbers the next year.
“We hope this is it, that this is the last gasp of indicators for the recession,” she said.
Democrats seized on the numbers as proof the nation is headed in the wrong direction.
“America should be showing true leadership on the great moral issues of our time — like poverty — instead of allowing these situations to get worse,” said John Edwards, the former North Carolina senator and Democratic vice presidential candidate. He has started a poverty center at the University of North Carolina at Chapel Hill.
Overall, the nation’s poverty rate rose to 12.7 percent of the population last year. Of the 37 million living below the poverty level, close to a third were children.
The last decline in overall poverty was in 2000, during the Clinton administration, when 31.1 million people lived under the threshold. Since then, the number of people in poverty has increased steadily from 32.9 million in 2001, when the economy slipped into recession, to 35.8 million in 2003.
The poverty threshold differs by the size and makeup of a household. For instance, a family of four was considered living in poverty last year if annual income was $19,307 or less. For a family of two, it was $12,334.
The increase in poverty came despite strong economic growth, which helped create 2.2 million jobs last year — the best showing for the labor market since 1999. By contrast, there was only a tiny increase of 94,000 jobs in 2003 and job losses in both 2002 and 2001.
Asians were the only ethnic group to show a decline in poverty — from 11.8 percent in 2003 to 9.8 percent last year. The poverty rate for whites rose from 8.2 percent in 2003 to 8.6 percent last year. There was no noticeable change for blacks and Hispanics.
The median household income, meanwhile, stood at $44,389, unchanged from 2003. Among racial and ethnic groups, blacks had the lowest median income and Asians the highest. Median income refers to the point at which half of households earn more and half earn less.
Regionally, income declined only in the Midwest, down 2.8 percent to $44,657. The South was the poorest region and the Northeast and the West had the highest median incomes.
The number of people without health insurance coverage grew from 45 million to 45.8 million last year, but the number of people with health insurance grew by 2 million.
Charles Nelson, an assistant division chief at the Census Bureau, said the percentage of uninsured remained steady because of an “increase in government coverage, notably Medicaid and the state children’s health insurance program that offset a decline in employment-based coverage.”
The estimates on poverty, uninsured and income are based on supplements to the bureau’s Current Population Survey, and are conducted over three months, beginning in February, at about 100,000 households nationwide.
Tags: Poverty Analysis